Can i file EIC if my nephew is living with me?

Answer 1

If you are claiming him as a dependent, then yes you can file for EIC with him as a qualifying child. If one of his parents also lives with you and claims him, then you can't.

Answer 2

There are certain rules that must be met in order to claim someone as a dependent on your tax return. The law changed last year, and in order to file as Head of Household, a person must be able to claim a dependency exemption for "whomever" they are claiming for dependency and possibly the earned income credit.

A. The person must be related to you. (Nephew qualifies for this test.)

B. You personally must have paid the cost of maintaining the household for yourself and the nephew (and any other dependents you may have) in order to file as Head of Household.

C. This person must have lived with you more than 6 months.

D. This person must not be claimed as a dependent on anyone else's tax return for any reason.

E. You need to know that, in case a parent files a tax return on which this person is claimed as a dependent, parents do have a superior claim over other people.

F. If this is a child, the cutoff age is 19 unless they are a student (more than half-time) and then the cutoff age is 24.

G. This person cannot have provided more than half of his own support. (For purposes of this test, child support, funds received from the state, from parents, and from other sources are counted as being part of the support for this individual.)

H. If the person had income, the gross income (before any expenses and taxes) must be less than $3300.

I. This person must not have filed a joint tax return with anyone else.

If your nephew qualifies as your dependent, and you are eligible for the earned income credit, then you may file and claim his personal exemption... knowing that if one or the other of the parents file with him on their tax return as a dependent, they will be awarded the exemption unless they cannot prove that he lived with them and they supported him.